USPS managers reach salary agreement

Postmasters will not see pay-for-performance increases in their 2012 paychecks, according to a new agreement with the U.S. Postal Service, reached after months of discussion.

The deal withholds postmasters’ and Postal Career Executive Service members’ pay-for-performance program ratings from salary determinations for fiscal 2011 and 2012. Pay-for-performance determinations are normally made at the end of a fiscal year and are not reflected in paychecks until January of the next calendar year, USPS spokesman Mark Saunders said.

In fiscal 2013, pay-for-performance determinations will be subject to a USPS review of compensation practices and other factors also will be considered, such as the state of the nation’s economy. At that time, the performance ratings either will be suspended or applied to salary determinations. Beginning in fiscal 2014 and 2015, pay-for-performance ratings could once again be applied to salary determinations, according to the agreement.

Pay for performance has been a contentious issue between USPS and the National Association of Postmasters of the United States and the National League of Postmasters -- the groups representing top postal employees. Although management is not permitted to form unions or bargain with USPS, the Postal Service still must consult with these associations regarding pay and benefits policies.

In addition, the new agreement raises minimums and maximums for postmaster salaries by 1 percent in fiscal 2012, 1.5 percent in fiscal 2013, and 2 percent in fiscal 2014 and fiscal 2015. This represents a 6.5 percent increase over four years.

The postmaster organizations also agreed to hikes in health plan contributions to bring USPS managers into parity with other federal employees. Currently, most feds pay 28 percent of their health care plans, with the government paying the balance. USPS contributions for postmasters’ plans will remain steady at more than 80 percent in 2011 and 2012, and then taper off until fiscal 2015, when the Postal Service will pay 72 percent and managers will contribute 28 percent, according to the new agreement.

Health plans, however, are at issue in postal reform discussions and could be altered again before the current agreement expires. The USPS five-year plan to solvency includes a request to leave the Federal Employees Health Benefits Plan, but the Senate does not favor this approach.

Pay for USPS senior managers came up during debate on the postal reform bill that passed the Senate in April.

“Congress felt that even top management should feel the pain of the cuts going on in the post office. Amendments were placed in the bill that cut the top management of the organization and amendments were introduced to get postal employees’ health care contributions in line with the federal government,” the National League of Postmasters said.

The postmasters organization acknowledged that the new agreement with USPS is “far from the perfect package,” but still backed the deal.

“We believe it is fair to all parties and in line with the financial difficulties facing the Postal Service while recognizing the hard work of postmasters,” NLPM said.

Clarification: An earlier version of this story described increases to postmasters' minimum and maximum salaries as salary increases; in fact, the change results in an automatic salary increases only for postmasters who earn the minimum salary.